Noah's Ark Resource Centre Incorporated v ACT Planning and Land Authority & Anor
[2017] ACAT 44
•15 June 2017
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
NOAH’S ARK RESOURCE CENTRE INCORPORATED v ACT PLANNING AND LAND AUTHORITY & ANOR (Administrative Review) [2017] ACAT 44
AT 70/2016
Catchwords:ADMINISTRATIVE REVIEW – planning and land development – development approval for a child care centre – subject site 100 metres from applicant’s child care centre – application for review of development approval decision – whether and how proposed development would adversely affect the applicant’s operations and its capacity to fund community programs – whether applicant is an ‘eligible entity’ with standing to bring application – whether applicant is likely to suffer ‘material detriment’ because of the decision to approve the development application – whether the Tribunal has jurisdiction to hear the application – whether application should be approved having regard to matters listed in section 120 of Planning and Development Act 2007
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 9, 10, 22P
Administrative Decisions (Judicial Review) Act 1977 (Cth)
Administrative Decisions (Judicial Review) Act 1989
Associations Incorporation Act 1991
Environmental Planning and AssessmentAct 1979 (NSW) ss 79C, 90
Human Rights Act 2004 ss 12, 21, 28, 40B
Land (Planning and Environment) Act 1991
Planning and Development Act 2007 ss 59, 119, 120, 121, 148, 156, 162, 407, 408, 408A, 409, 419 & Sch 1
Subordinate
Legislation cited: Commercial Zones Development CodeLocal Centres Zone
Cases cited:Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27
Argos Pty Ltd v Corbell & Ors (2014) 254 CLR 394
Australian Foreman Stevedores Association v Crone (1989) 20 FCR 377
Baptist Community Services v ACT Planning and Land Authority and Ors [2015] ACTCA 3
Bassingthwaighte v Roma Town Council & Ors [2010] QPEC 91
Catherine Rudder v ACT Planning and Land Authority & Jopratz Pty Ltd & Galetti Holdings Pty Ltd [2010] ACAT 24
Concerned Citizens of Canberra Inc v Chief Executive (Planning and Land Authority) (2015) 303 FLR 49
Darkan v The Queen [2006] HCA 34
De Angelis v Wingecarribee Shire Council [2013] NSWLEC 1148
Fabcot Pty Ltd v Hawkesbury City Council (1997) 93 LGERA 373
Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher (2015) 254 CLR 489
Glass v ACT Planning and Land Authority and Anor [2016] ACAT 96
Isgro v Gold Coast City Council (2003) QPELR 41
Jewel Food Stores v Minister for the Environment Land and Planning (1994) 122 FLR 269
Kentucky Fried Chicken v Gantidis (1979) 140 CLR 675Lewiac Pty Ltd and ING Real Estate Joondalup BV v Gold Coast City Council & Ors [2002] QPEC 80
Mason and ACT Planning and Land Authority and Ors [2009] ACAT 7
Thomson v ACT Planning and Land Authority [2009] ACAT 38
List of Papers/
Texts cited:J Middleton, Statutory Interpretation – Mostly Common Sense?, Melbourne University Law Review Annual Lecture, 14 April 2016
Tribunal: President G Neate AM
Senior Member G TrickettDate of Orders: 15 June 2017
Date of Reasons for Decision: 15 June 2017
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AT 70/2016
BETWEEN:
NOAH’S ARK RESOURCE CENTRE INCORPORATED
Applicant
AND:
ACT PLANNING & LAND AUTHORITY
Respondent
NIKDIA HUME PTY LIMITED
Party Joined
TRIBUNAL:President G Neate AM
Senior Member G Trickett
DATE:15 June 2017
ORDER
Having decided that Noah’s Ark Resource Centre Incorporated is not an eligible entity for the purposes of the Planning and Development Act 2007 and does not have standing to bring the application, the Tribunal orders that:
1. The application by Noah’s Ark Resource Centre Incorporated for review of the decision by the ACT Planning and Land Authority to approve Development Application 201528713 is dismissed.
………………………………..
President G Neate AM
Delivered for and on behalf of the Tribunal
REASONS FOR DECISION
Introduction
1. On 17 October 2016, the ACT Planning and Land Authority (Authority) decided to approve with conditions under the Planning and Development Act 2007 (P&D Act) Development Application 201528713. That Development Application (DA) proposed the construction of a child care centre and associated works, and a variation of a Crown Lease to permit the use of Block 2 Section 28 at Rivett, Australian Capital Territory (the subject site) for a child care centre.
2. Noah’s Ark Resource Centre Inc (Noah’s Ark) operates a child care centre near the subject site. It has applied to the ACT Civil and Administrative Tribunal (Tribunal) under the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) for a review of the Authority’s decision. Noah’s Ark submits that the correct or preferable decision is to set aside the Authority’s decision to approve DA 201528713 and to substitute for it a decision refusing DA 201528713.
3. The Authority submits that the decision under review should be affirmed, and the application by Noah’s Ark be dismissed.
4. The lessee of the subject site, Nikdia Hume Pty Ltd (Nikdia Hume), submits that the DA should be approved.
Key issues
5. The application gives rise to three main issues:
(a)whether and how the proposed development on the subject site will adversely affect Noah’s Ark;
(b)whether Noah’s Ark has standing to bring the application; and
(c)whether the Tribunal has jurisdiction to hear the application.
If the Tribunal has jurisdiction, it will be necessary to consider how its power should be exercised.
6. Although the second and third issues can be characterised as threshold issues, they can only be determined in light of the evidence about whether and how the proposed development will adversely affect a particular aspect of the operations of Noah’s Ark. Consequently, it is necessary to consider the evidence and make findings in relation to the first issue before deciding the other issues.
7. It is appropriate to mention two procedural issues briefly.
Application to join two separate proceedings
8. Before the hearing of this application, the legal representatives of Noah’s Ark sought a direction from the Tribunal that this application be heard together with a separate and subsequent application by Noah’s Ark in relation to a decision by the Authority to approve another child care centre (AT 10 of 2017). The later decision was made on 20 February 2017 in relation to DA 2012629784. The proposed 110 place child care centre would be on Block 22 Section 28 at Rivett Place, Rivett. That site is approximately 100 metres from the existing child care centre operated by Noah’s Ark, as is the site which is the subject of the present application. Indeed, the locations of the current and proposed centres are at points of an equilateral triangle whose sides are 100 metres long.
9. The representatives of Noah’s Ark stated that the issues raised in the two proceedings would be identical, as would be much (if not all) of the effect of the evidence. They submitted that hearing the two proceedings together would allow significant efficiencies and savings in time and costs for the parties and the Tribunal, and would avoid the risk of conflicting findings of fact and applications of principle arising out of the same factual matrix.
10. For reasons given at a directions hearing on 6 March 2017, the Tribunal (constituted by the President) dismissed the application for the two matters to be heard together. Among other things, the Tribunal noted that if the scheduled hearing of the present application was vacated, the Tribunal would not be able to determine the matter within 120 days of the application being made as required by section 22P of the ACAT Act.
11. As it happens, the hearing of this matter occurred on 8, 9 and 10 March 2017, just few days before the expiration of that period on 15 March 2017. Hence the President decided, under section 22P(3) of the ACAT Act to extend the period for deciding this application because it was in the interests of justice to do so.
View
12. The parties agreed that, given the issues before the Tribunal in this application, the hearing could proceed without a view of the subject site and the child care centre operated by Noah’s Ark. Accordingly, the Tribunal did not inspect those premises.
The subject site and the proposed use of it
13. The subject site is at 57 Bangalay Crescent, Rivett, on the corner of Bangalay Crescent and Rivett Place. It has an area of 1,371 square metres.
14. The site was previously used as a petrol service station (demolished many years ago), and has been remediated. Development Approval was issued subject to the need to obtain written endorsement of the Environmental Protection Agency prior to commencement of works (Condition A3).
15. The subject site is located in a Commercial Zone 4 (CZ4) - Local Centres Zone under the Territory Plan. Consequently the Commercial Zones Development Code (CZDC) and the CZ4 – Local Centre Zone Development Table, which contains the relevant objectives and development table for the zone, apply to the subject site.
16. The CZ4 zone is surrounded by land zoned Community Facility Zone and Residential Zone 2 to the west. The CZ4 – Local Centre Zone Development Table prescribes the merit track for the proposed kind of development, ‘community use’.
17. The purpose clause of the current Crown Lease (Volume 2123 Folio 58, issued on 20 August 2007), states that the land is to be used for one or more of the following purposes:
(a)non-retail commercial use;
(b)residential use limited to multi-unit housing; and
(c)shop.
18. The gross floor area shall not exceed 887 square metres.
19. The approved variation to the Crown Lease adds to the list of uses in the purpose clause “community use limited to child care centre.” It does not vary the gross floor area limit.
20. The community and recreational facilities in the immediate locality of the subject site include shops, playing fields, an aged persons’ facility and the Noah’s Ark Resource and Child Care Centre (Noah’s Ark Centre Rivett). On the opposite side of Bangalay Crescent is a residential area.
21. Kids Club Rivett Pty Ltd (Kids Club Rivett), an associated entity of Kids Club Early Childhood Learning Centres Pty Ltd (Kids Club), proposes to operate a 91 place child care centre on the subject site if DA 201528713 proceeds.
22. Corie Stone, the Managing Director of Kids Club, gave evidence about the general approach of Kids Club to child care centres and the proposal for the subject site.[1] He stated that Kids Club places a high priority on the inclusion of children with additional needs. Its Inclusion of Children with Additional Needs Policy states, among other things, “All enrolled children are treated without bias regardless of ability, gender, religion, culture, family structure, or economic status or disability.” One of the stated aims of that policy is to “enable children with additional needs and abilities to have access to our program specialised equipment and specific resources.”
[1] Exhibit PJ6
23. According to Mr Stone, Kids Club “accepts children for who they are and how they learn.” It currently provides for children with diagnosed conditions of autism, and has previously catered for many children with a variety of additional needs and physical disabilities. It applies to the Commonwealth Government for support workers to assist with the care and education of particular children with additional needs. Kids Club has provided, and continues to provide, additional support workers at its own cost.[2] It works with a variety of special needs consultants and ensures that its staff have access to specialist training for those children.
[2] In his oral evidence, Mr Stone explained that, depending on the child's additional needs, Kids Club will include an extra teacher to the roster for a certain time at its own cost. That provision is relatively rare, between zero and three times in one year.
24. In his oral evidence, Mr Stone described how a child at a Kids Club centre who might have special needs would be assessed, and how arrangements are made for a special needs teacher to help with that child. Sometimes another teacher is included until the child is assessed. He conceded that if a child exhibits difficult behaviours which are disruptive, but that child is not eligible for funding, the child would be asked to leave. However, he said that in 21 years of being in child care he has never asked a family whose child had a disability to leave, whether or not Kids Club had funding for them.
25. At the time of the hearing, Kids Club did not operate a child care centre in the ACT. It was preparing to open one in Symonston. Kids Club had been chosen to provide that centre for Geosciences Australia.
26. Consistently with Kids Club’s current and past practice, it is intended that Kids Club Rivett would provide care for children with a range of conditions, physical disabilities and additional needs. Mr Stone asserted that Kids Club Rivett will become an important educational facility in the community of Rivett and surrounding areas.[3]
[3] Exhibit PJ6.
The basis of the objection by Noah’s Ark
27. In essence, Noah’s Ark seeks the setting aside of the Authority’s decision to approve DA 201528713 because the Noah’s Ark Centre Rivett operates near the subject site, surplus funds[4] from that centre are used to finance a range of community programs operated by Noah’s Ark in conjunction with other bodies, and the proposed development would adversely affect the profitability of the Noah’s Ark Centre Rivett and hence put in jeopardy the community programs that Noah’s Ark resources from the surplus funds derived from that centre.
[4] As Noah’s Ark is a not-for-profit organisation it would be incorrect to refer to “profits”.
28. To assess the strength of the case advanced at the Noah’s Ark Centre, it is necessary to understand:
(a)the objects and philosophy of Noah’s Ark;
(b)the range of community programs provided by Noah’s Ark; and
(c)the services offered at the Noah’s Ark Centre Rivett and how the surplus funds from that centre are applied to subsidise community programs.
29. It will then be necessary to consider the submissions by Noah’s Ark in the context of the extent of the threat to the profitability of its Rivett operations said to be posed by the proposed development.
30. Written and oral evidence was given on behalf of Noah’s Ark by:
(a)Donnald McMichael, the Chief Executive Officer and Business Manager of Noah’s Ark;[5]
(b)Anthony Wilson, a chartered accountant and Principal Consultant of the accounting firm Accountability;[6]
(c)Janice Brennan, the Manager, Early Childhood Programs based at the Noah’s Ark Centre Rivett;[7] and
(d)Dr Brenda Abbey, the principal of Childcare by Design, who has more than 35 years of experience in early childhood education and care including as the director of child care centres, and as a consultant since 2000 in developing and reviewing child care centres.[8]
[5] Exhibit A7
[6] Exhibit A6
[7] Exhibits A3 & A4
[8] Exhibit A1
31. Written and oral evidence was given on behalf of Nikdia Hume by:
(a)Mr Stone;[9] and
(b)Phil Henry, the Principal and Managing Director of Business Geographics Pty Ltd, a location research company specialising in the analysis of geographic and demographic information to assist Australian companies with marketing and strategic planning including specialist child care research.[10]
[9] Exhibit PJ6
[10] Exhibit PJ1
The objects and philosophy of Noah’s Ark
32. Noah’s Ark is a not-for-profit entity incorporated under the Associations Incorporation Act1991 (ACT). Its objects are:
(a)To support the cognitive, emotional, experiential, physical and social development of children and their families.
(b)To support the therapeutic and educational value of play and its role in the development of children through provision of resources, professional support and advice.
(c)To encourage and foster the inclusion of children with special needs into all services and activities of the Association.
(d)To encourage and foster skills and knowledge of those involved in parenting and providing care for children.
(e)To work with all individuals and organisations to further the objectives of the Association.
(f)To seek government and non-government involvement to achieve the above objectives.
33. The operating philosophy pursued by Noah’s Ark has been to meet the needs of families in relation to early childhood education and care which are not otherwise met by the government or private sector.[11]
[11] Exhibit A7, paragraph 5
The range of community programs provided by Noah’s Ark
34. Since 1973, Noah’s Ark has conducted early learning community programs in furtherance of its objects at various locations in the ACT and Queanbeyan. It currently provides community programs at premises in Giralang, Lyons, Weston, Jerrabomberra and at two locations in Rivett, including the Noah’s Ark Resource Centre at 79 Bangalay Crescent. The only long day care centre operated by Noah’s Ark is at that address.
35. Dr Abbey’s report provided information about the five programs provided by Noah’s Ark in collaboration with other organisations – Playschool, Play and Learn, Resource Library (often described as the Toy Library), Paint and Play, and the Schools as Community Centres.[12] Mr McMichael’s witness statement also provided information about the programs.[13]
[12] Exhibit A1 pages 9-11
[13] Exhibit A7, paragraphs 6-7
36. Dr Abbey described the community programs as “important to the well-being of disadvantaged, vulnerable, and isolated families and their children in the ACT and Queanbeyan.” She stated that those who use these programs may feel they have “no suitable alternative” if the programs are discontinued. In her view, this eventuality “should not be considered lightly” as it is her professional and personal experience that families and children look forward to, value, and rely on as few as two hours in programs such as these. Dr Abbey also stated:
The benefits children receive are exponential as they commence pre-kindy with enhanced development, understanding of routines, dispositions towards learning and social awareness that they may not have acquired otherwise or elsewhere ... In addition, their families have learnt the basics of how to support their children, and become familiar and more confident in what would otherwise be a daunting experience.[14]
[14] Exhibit A1, page 11
37. Ms Brennan is based at the Noah’s Ark Centre Rivett. She gave evidence about the range of programs run by Noah’s Ark that she oversees,[15] their distinctive features, and their benefit to local families. She stated that because the Noah’s Ark Playschool has the financial support of the long day care program, this model of Playschool can be offered at an hourly fee less than or equal to other Playschool programs in Canberra, ensuring that it is affordable to most in the community (although some of their families struggle to meet even this fee level).[16]
[15] The Toy Library, Playschool, Play and Learn playgroup, and Paint and Play playgroup
[16] Exhibit A3
38. Ms Brennan gave oral evidence about the nature and extent of the different contributions that Noah’s Ark makes to specified community programs such as Playschool, Play and Learn, and the Paint and Play programs. For example, Noah’s Ark provides a qualified educator to facilitate the playgroup and provides resources (such as play dough and puzzles), while other bodies provide the venues (which Noah’s Ark hires), advertising and some other staff.
39. That oral evidence was supported by the Playschool 2017 Parent Information Booklet, Welcome to Play & Learn Sessions Booklet, and the Memorandum of Understanding between Communities@Work, Noah’s Ark Family and Community Centres, Woden Community Services Inc and The Smith Family dated January 2016 about the Paint and Play program.[17]
[17] Exhibit A2
40. Ms Brennan pointed out that, so far as she was aware, the provision of a qualified facilitator for playgroups run by Noah’s Ark distinguishes those playgroups from others in the ACT (such as those run by the parents of participating children).
41. Ms Brennan provided a letter from the mother of one child who started Playschool at the beginning of the 2017 school term. The mother wrote with appreciation about Noah’s Ark accepting her severely disabled son into the program when other ACT playschools did not.[18] Ms Brennan also referred to a “success story” involving a child with physical disabilities who gained confidence and independence by attending Playschool.[19]
[18] Exhibit A8
[19] Exhibit A3, paragraph 36
42. Despite the distinctive features of these programs, Ms Brennan confirmed Dr Abbey’s understanding that they are not owned, in the sense that someone else could conduct the same or similar programs (such as Playschool), subject to complying with the licensing process.
43. According to Noah’s Ark, those community programs enable families, who would otherwise have difficulty in doing so, to give their children an early learning experience to assist them in later education and development and to obtain support and information generally. The programs provide benefits to participants which are not provided by a long day care program, and, to the extent that some benefits may also be provided by a long day care program, enable families for whom long day care is not suitable to have access to those benefits.
44. Indeed, Mr McMichael described these programs as unique in the ACT and Queanbeyan. Although other play schools operate on a “cooperative” basis, they do not provide the same level of facilitation or are available to parents who are unable to participate in the running of the operation.[20]
[20] Exhibit A7 paragraph 8
45. In Noah’s Ark’s submission, the community programs are of benefit to members of the community who participate in them and to the community generally.
Noah’s Ark Centre Rivett
46. Noah’s Ark has been operating at 79 Bangalay Crescent, on the site of the former Rivett Primary School, since 1998 under a license agreement with the Australian Capital Territory. The licence to occupy the premises was initially on a month-to-month basis. It was extended to a 12 month term from May 1998, and was monthly thereafter.[21] During the term of its licence, Noah’s Ark’s operations have been relocated to a different part of the school premises, but the change of location was not reflected in the licence.
[21] Exhibit PJ3
47. There was some evidence that recently Noah’s Ark was offered a 12 months term under a new licence, but that document had not been signed at the time of the hearing.
48. In 2009, Noah’s Ark commenced to operate a long day care centre there. Initially the day care centre was licensed for 15 places per day for children between 12 months and five years of age. Since 2010 it has been licensed for 89 places, 81 of which are of practical utility. Accordingly, the Noah’s Ark Centre Rivett offers a maximum of 81 places.
49. According to Mr McMichael, Noah’s Ark promotes its operations, including day care, as having a special needs focus. To that end it is prepared to take on children of any level of need. He gave as examples:
(a)an infant child with cerebral palsy who would otherwise have been excluded from mainstream early childhood services and who remained with Noah’s Ark from July 2011 until graduating to formal schooling in 2015; and
(b)another infant with severe cerebral palsy who was taken on in early 2015.[22]
[22] Exhibit A7 paragraphs 15, 16
50. He also stated that places for numbers of other children with diagnosed autism spectrum disorder, Asperger syndrome and global development delays were available from the inception of the long day care program and continue to the present time. The total number of children in that category at the Noah’s Ark long day care program depends on available teaching resources and/or government funding to enable one-on-one care if necessary. Noah’s Ark has not refused child care to any child with a disability, providing the appropriate resources are available. It will often fund a considerable part of a child’s first months under its care, particularly if the child has no formal diagnosis of their condition. An assessment of the child’s behaviour is organised after classroom observations by trained teachers and subsequent discussions with the parent. After diagnosis, Noah’s Ark is then able to apply for funding, currently amounting to $16.00 per hour of the $24.00 per hour that the carer is paid. The remaining $8.00 per hour is a cost to Noah’s Ark.[23]
[23] Exhibit A7 paragraphs 16-21
51. Mr McMichael provided an email message dated 15 February 2017 from the grandmother of a boy with a quadriplegic condition describing the support provided by Noah’s Ark to the boy a couple of years earlier. That support included arranging financial assistance so that a one-on-one carer attended solely to the boy’s needs while at Noah’s Ark. She continued:
Many more little people of all ages and backgrounds were given the same consideration and care, and I know just how indebted to Noahs Ark we all are for this inclusive initiative of your organization.[24]
[24] Exhibit A2
Subsidies by Noah’s Ark of community programs
52. Historically, Noah’s Ark’s early learning community programs were made possible by the assistance of government funding. However, such funding is not guaranteed. Consequently Noah’s Ark has, from time to time, been forced to discontinue programs when funding for them has ceased.[25] While some funding continued for specific programs, it was on a short term basis. The only government grant currently received is for the Toy Library.[26]
[25] In the past, community-based programs provided by Noah's Ark were generally funded by the Commonwealth until self-government in the ACT when that funding was transferred to the Territory. Noah's Ark has operated other programs, such as an after school care program for approximately 15 disabled students which was begun at the request of the ACT Government which provided funding for two years. When funding ceased, Noah's Ark continue the program for some 18 months until it was unable to afford the operating cost.
[26] Exhibit A7, paragraph 11
53. Noah’s Ark commenced to operate the long day care centre in Rivett in 2009, predominantly to provide a continuing source of income so that it could maintain its community programs to provide care for children with disabilities whose family could not otherwise afford it or whose children would not be accepted in other day care centres because of their disability. The income generated by the day care centre operations which is surplus to needs in respect of maintaining the operations of the day care centre is used to subsidise the cost of the community programs. By that means Noah’s Ark is able to keep those programs operating, and also meet the cost of supporting children with special needs enrolled in the day care centre.
54. According to Mr McMichael, the long day care program employs approximately 30 staff. A further 8 to 10 staff are involved in the community programs and only two of those are employed as casuals. The long day care program and the community programs operate largely independently, with only two staff members being involved in both. Most of the operating expenses of the community programs are met from the income they generate. However the overheads associated with those programs are covered by funds generated from the day care centre operations. That amounts to approximately $80-100,000.00 per annum. However, Mr McMichael said there had been no separate recording of the cost of meeting the special needs of children in the day care centre. That cost varies from time to time according to the level of one-on-one attention that a child may require.[27] He estimated that the resources provided have, on average been the equivalent of one full-time educator each year at a cost of approximately $50,000. That cost is met out of the day care income.[28]
[27] Exhibit A7, paragraphs 24-26
[28] Exhibit A7 paragraph 27
55. Having prepared the annual financial accounts for Noah’s Ark Centre Rivett for the previous three years, Mr Wilson gave evidence that the total amount of the subsidy provided by the operation of the long day care centre in favour of the community programs is $64,500.00 per annum. Based on those figures, he estimated that the long day care program needs to maintain occupancy rate in excess of 91% in order to be able to continue to provide that subsidy. He also noted that Noah’s Ark has sustained losses in several previous years and, as a result, its equity has diminished. He concluded that the ability of Noah’s Ark to continue to absorb losses is “quite limited.”[29]
[29] Exhibit A6
56. Noah’s Ark submits that:
(a)it needs to be able to maintain its present day care centre occupancy rate in order to be able to keep the other programs operating;
(b)the operation of a 91 place child care centre approximately 100 metres from its long day child care centre will reduce the occupancy level of its centre;
(c)that would reduce and probably eliminate the level of surplus such that Noah’s Ark would not be able to maintain its community programs and meet the costs of supporting children with special needs enrolled in the day care centre;
(d)cessation of the community programs and support for children with special needs in its day care centre will mean the loss of services and benefits presently enjoyed by the community; and
(e)that loss will not be made good by the operations of the proposed new long day care centre on the subject land.
Noah’s Ark’s submissions in context
57. In order to assess the potential impact of the proposed development on Noah’s Ark’s operations at Rivett, and hence its community activities, it is necessary to understand:
(a)the number of child care places currently available in the catchment area of the Noah’s Ark Centre Rivett;
(b)whether the number of current places meets, exceeds or falls short of local demand or need;
(c)the anticipated level of demand for child care places in that area in the foreseeable future; and
(d)whether the addition of the proposed development is likely to affect the operations of Noah’s Ark.
58. The evidence discloses that, in addition to the proposed development on the subject site, there are other proposed or imminent child care centres that are also potentially relevant to the viability of Noah’s Ark’s operations at Rivett.
The estimated demand for, and potential impact of, the proposed development on the subject site
59. Noah’s Ark contends that there is sufficient supply of child care places in the catchment area for the subject site, additional child care centres in Rivett or Weston Creek are not necessary (noting that a centre is being constructed in Coombs, a few kilometres to the north of the subject site), and the proposed development would adversely affect Noah’s Ark’s operations by attracting some current or prospective children from the Noah’s Ark Centre Rivett. Evidence in support of its submissions was given by Mr McMichael, Ms Brennan and Dr Abbey.
60. On the other hand, Nikdia Hume contends that there is an unmet need for child care places in the catchment area for the subject site, and the proposed development will meet that need as well as attracting some people who currently do not use child care facilities inside or outside the catchment area.
Mr McMichael’s evidence
61. The Noah’s Ark Centre Rivett has a capacity of 405 places each week. According to Mr McMichael, at the time of the hearing it had a current vacancy rate of 69 places (17%).[30] He attributed the vacancy rate to:
(a)the normally lower-level of uptake in places offered at the start of the year;[31] and
(b)the impact of the opening in May 2014 of the YMCA day care centre which operates on Dixon Drive in Holder (a matter considered later in these reasons).
[30] Hence, the occupancy rate was 83%
[31] Mr McMichael gave evidence that Noah’s Ark tends to have more vacancies at the beginning and end of each year. This is due to new children orientating at the beginning of each year, which is often staggered throughout January and early February to ensure smooth and effective transitions for children and their families. There is also a rise in vacancy numbers at the end of each year when children who are moving on to formal schooling cease enrolment with the day long care. Over the past three years, enrolments are at peak in the middle of the year with the lowest vacancy rates in the months of June to October. Mr McMichael provided a monthly breakdown of vacancies for 2013, 2014, 2015 and 2016 (Exhibit A7)
62. Mr McMichael stated that, prior to May 2014, the vacancy rate at the Noah’s Ark Centre Rivett was “very low.” In 2014 and 2015, the vacancy rates increased “significantly.” The figures he provided for each calendar year record the total number of positions offered and the total number of vacancies for that year. Those figures show percentage vacancies to be about 9% in 2013, 13% in 2014 and 14% in 2015. Although the vacancy rate has improved (i.e., lessened) since then to about 10% in 2016, he does not expect that it will improve greatly in the near future given that the YMCA centre has excess capacity and has yet to open two rooms. In his opinion, there was “no other reasonable explanation” for the rise in the vacancy rate at the Noah’s Ark Centre Rivett. That experience leads him to expect that the opening of a 91 place day care centre on the subject site “will have a significant impact on the Noah’s Ark vacancy rate and its profitability and the subsequent community based services that it is able to provide/underwrite.”[32]
[32] Exhibit A7, paragraphs 30-32
63. In support of those opinions, Mr McMichael referred to the financial accounts of Noah’s Ark for the years to 31 December 2014 and 31 December 2015. He stated that Noah’s Ark has reported losses in varying amounts in eight of the past 12 years. The income and expenditure statements in evidence showed a net loss in 2013 and, despite the drop in occupancy, a net surplus in 2014 and 2015. The accountant for Noah’s Ark had provided a budget that projected a substantial loss for 2017.
Ms Brennan’s evidence
64. Ms Brennan gave evidence that, for the purposes of these proceedings, she contacted the following long day care centres in the Woden and Weston Creek areas to ask whether they were operating at capacity.[33]
[33] Exhibit A4
(a)Weston Creek Children’s Centre – offers 105 places and had only a couple of vacancies on a Monday and Friday;
(b)Stirling Child Care – offers 24 places and operates at about 80% occupancy;
(c)YMCA Early Learning Centre in Holder – offers 124 places and operates at 87% occupancy;
(d)Woden Early Childhood Centre - offers 61 places and operates at 86% occupancy (having operated at capacity for the previous three years);
(e)Lollipop Centre at Woden – offers 60 places and operates at around 84% occupancy;
(f)Lyons Early Childhood Centre – offers 77 places and operates at 86% occupancy.
Dr Abbey’s evidence
65. Dr Abbey prepared an expert witness report on the impact of the proposed child care centre on ACT community programs.[34] That report assessed the potential impact of a new child care centre nearby on Noah’s Ark’s operations at Rivett.
[34] Exhibit A1
66. Based on the level of vacancies in four centres within the postcode area within which the Noah’s Ark Centre Rivett is located, Dr Abbey stated that it is:
reasonable to suggest that the existing childcare centres in Rivett and nearby areas already provide more childcare places than are required to meet the demand and a new centre will need to target these existing enrolments, rather than seek to meet any unmet demand of families who cannot find care for their children.[35]
[35] Exhibit A1, page 7
67. She continued:
there is already availability of child care places in every age group for every day of the week in existing centres in this postcode, including in a centre that was opened just over two years ago, and which has still to open all of its rooms. As a result, a new centre in such a situation must first attract its enrolments predominantly from families using existing centres.[36]
[36] Exhibit A1, page 12
68. Those conclusions were supported by enquiries made by Dr Abbey doing a ‘secret shopper’ survey of vacancies at those centres.
69. Based on her observations, Dr Abbey stated that when a new centre opens it “invariably” attracts a percentage of the children enrolled in existing nearby centres (sometimes as high as 20% to 25% of enrolments), regardless of the preventative steps taken by the existing centres. This percentage is affected by a range of factors.[37]
[37] The variables include the extent to which parents are satisfied with the current centre, the time of year (the beginning or near the end of a year), the age of the children, whether children's friends moved to the new centre, the centre's connections with the community, whether the new centre has recruited staff from their child's present centre, and the convenience of the location of the new centre
70. Dr Abbey recorded that the opening of the YMCA Early Learning Centre at Holder 2004 impacted upon enrolments at the Noah’s Ark Resource Centre and stated that “it is reasonable to expect that a centre opening in the same street will have a greater detrimental effect.”[38] In her opinion:
While Noah’s Ark Long Day Care Service appears to be well-connected to the local community and its parents express satisfaction with the quality of care and education provided to their children, together with the consistency, knowledge and skill of its educators, the Service is likely to lose a percentage of its enrolled children to the new centre, particularly as this centre is within 100 metres of Noah’s Ark Long Day Care Service, minimising logistical disruption for parents.
Further, Noah’s Ark Long Day Care Service operates out of a building that has existed for some time and naturally shows its age and use.[39]
[38] Exhibit A1, page 6
[39] Exhibit A1, page 6. Dr Abbey suggested that Noah's Ark would need to upgrade the Centre which “looks a little tired.”
71. Consequently, based on her experience and local information, Dr Abbey concluded that it “seems likely that a reduction in enrolments of even a relatively small percentage could have a significant dual impact,” that is, an impact on the continuing viability of the Noah’s Ark service and the proceeds available to it to subsidise the family and community programs.[40]
[40] Exhibit A1, page 6
72. In her report, Dr Abbey suggested a number of practical actions available to Noah’s Ark in an attempt to mitigate the effect on its enrolments of the opening of a similar centre nearby. One of the strategies is to consider raising its fees both in the long day care centre and for the family and community programs. That strategy has the risk of reducing access to the services to disadvantaged and isolated families and those with children with additional needs. However, taking into account the well-recognised ‘pricing perception paradox’, there might be a perception that other centres are better because they charge more.[41]
[41] Exhibit A1, page 8
73. In his submissions about Dr Abbey’s evidence, Mr Erskine SC for Nikdia Hume did not quarrel with her expertise and experience, but sought to establish that:
(a)it was limited to assessing how child care centres operate (particularly whether they comply with national standards and licensing requirements); and
(b)did not include demographic analysis, financial and accounting matters.
74. Dr Abbey conceded that her report did not contain relevant demographic information (for example, about the adjoining suburbs of Coombs and Wright in Molonglo) because that is not her area of expertise.
Mr Henry’s evidence
75. Mr Henry is the CEO of a demographic research company specialising in child care research analysis. Although he does not have university qualifications in demography or statistics, he has a background in analysing geographic and demographic data and has had more than 15 years of experience researching the child care sector in Australia. Mr Henry has developed a Childcare Needs Assessment Report to support due diligence and feasibility for child care centre development and acquisition.[42] Dr Abbey told the Tribunal that she recommends him to people to have feasibility studies done. Although Mr Henry’s experience and expertise were not in dispute, aspects of his analysis and opinion evidence were. Those criticisms are noted later in these reasons for decision.
[42] Exhibit PJ1, paragraph 3
76. Mr Henry gave evidence in relation to the demand for child care services in Rivett and its catchment area. There was an issue about the appropriateness of the boundary of the catchment area that he used. According to his report,[43] the boundary of a relevant catchment area is assessed by taking into account the unique geographic characteristics of each site. Mr Henry gave oral evidence that the criteria for determining the boundaries of a catchment area included accessibility to the subject site (the neighbourhoods from where people are likely to travel to the site), whether public transport or private vehicles are used, road networks, geographical considerations (such as the location of parklands and major roads), and the presence of other child care centres in the area that provide suitable services at an appropriate price. Apart from child care facilities near workplaces (a factor discussed later), most people will not travel too far to a child care centre. About 70% to 80% of enrolments will be drawn from an area within two to three kilometres of the child care centre. According to Mr Henry, there is usually some consistency between centres in that “enrolments come from the local area.”
[43] Childcare Needs Assessment: Proposed Development Site 57 Bangalay Cres Rivett ACT 2611, February 2017
77. For the purpose of advising about the proposed development at the subject site, he described the catchment area as bounded by the Tuggeranong Parkway, stopping at Chapman in the south and extending north to include Coombs. The major catchment area (or study area) is the area from which an estimated 80% or more of enrolments at the subject site would come.[44] He said that catchment areas are “obviously subjective” and vary from site to site. In this case, the Tuggeranong Parkway was used to define the catchment area for the subject site as a separate market from Lyons and areas east of the Parkway. It is assumed that people follow such major commuter routes into the city.
[44] Exhibit PJ1, report pages 8, 19
78. Mr Henry agreed that if the catchment area had been described differently (for example, to exclude most or parts of Coombs well to the north of the subject site and include Kambah, the next suburb to the south of the subject site), the figures would be different as the catchment would not include an area which has a large growth in young families. As he put it, “the definition of the catchment certainly will affect those demand and supply figures.” He stated that Coombs was included in the catchment area because there was no child care centre there at the time his report was prepared. That centre was under construction at the time of the hearing.
79. In the absence of any evidence of a more appropriately circumscribed catchment area for the subject site, the Tribunal is content to proceed on the basis that the catchment area is as described by Mr Henry
80. According to Mr Henry, Noah’s Ark has a “very different catchment to other centres because it provides a specific service to a specific market, so it would have a much broader and larger catchment.” However, there was no data from Noah’s Ark to support that assertion.
81. Mr Henry set out information and assessments of population growth and demand for child care places in the 2611 postcode area (which includes but extends well beyond the boundary of the catchment area). In preparing his report, Mr Henry relied on Australian Bureau of Statistics (ABS) data from the 2011 census and made estimates based on ABS estimates up to 2015 and information from the ACT Treasury up to 2015, as well as his firm’s research into the development of land in different areas. He observed that new estates tend to attract young families with a higher proportion of adults of childbearing age and children. Within the 2611 postcode area, there are variations between established areas and new suburbs such as Coombs, which will have a “much different population profile” once it is developed fully.
82. In summary, his written evidence was that:[45]
[45] Exhibit PJ1, paragraphs 12-17
(a)the ratio of children per child care place is a useful indicator of the local long day care market, and a ratio of less than 3:1 is often typical of markets that are oversupplied whereas a ratio greater than 4:1 can sometimes indicate a market that has some supply restriction or undersupply;
(b)there are five long day care centres in the major catchment area that supply a total of 394 places to an estimated market of 1,847 children under five years of age, which represents a high ratio of 4.69 children per child care place;
(c)the average annual occupancy rate at existing centres is estimated at 87.14% (a rate that is proximate to the data provided by Ms Brennan, noted earlier), which suggests a supply restricted market in which some parents might have difficulty finding child care in the local area that meets their needs;[46]
(d)although the estimated current demand for places in the major catchment exceeds the available local supply, due to the suburbanite/commuter nature of the local market and the limited supply of places up to 100 places per day leave the major catchment to utilise long day care services elsewhere (such as near parents’ workplaces);[47]
(e)it is assumed that a future increase in the supply of places (from the subject site and other proposed developments) will provide an attractive alternative to some commuters and further reduce this net loss;
(f)the two new centres established in 2014 in Holder (the 126 place YMCA Early Learning Centre and the 50 place St Jude’s Early Learning Centre) alleviated the immediate unmet demand in the major catchment, and likely picked up some market share from existing centres as well as retaining some enrolments that previously left the area;
(g)although that increase in supply is relatively significant as a proportion of the original supply (a change of +80.7% since 2011), most centres (including the Noah’s Ark Centre Rivett) still report high occupancy rates; and
(h)on the assumption that a future increase in supply (that is, one or two new purpose-built centres) attracts the unmet demand that currently leaves the catchment due to the limited availability of places (and that it would attract to the area some people from places such as Lyons), it is estimated that the market could support an additional 200 to 250 places by 2021[48] without creating significant long-term oversupply of places.
[46] That assessment is said to be supported by telephone survey conducted two centres in the major catchment, details of which are set out in Exhibit PJ1, paragraph 13.
[47] That figure has reduced from an estimated 150 places in 2011 as a result of increases in supply since then (Exhibit PJ1, paragraph 15)
[48] A table in Mr Henry’s report showed an estimated 2,010 children of 0 to 4 years of age in the area in 2021, an increase of 163 from the estimate for 2017
83. Where child care places are not available locally, families may make alternative arrangements such as:
(a)using child care closer to the workplace;
(b)using licensed and regulated family day care facilities;
(c)using extended family care;
(d)not returning to work.
84. Mr Henry conceded that an unquantified proportion of parents would always use child care elsewhere. He seemed to acknowledge that some of the children in the catchment area go to family day care but said that he did not look at family day care as part of his standard report. He explained that the Productivity Commission looks at a family day care separately, so that the figures he uses for participation and attendance are for long day care only. He described the two types of care as “separate demands.”
85. For the purposes of the analysis in his report, Mr Henry proceeded on the basis that:
(a)average occupancy rates over 100% indicate an undersupply;
(b)average occupancy rates over 85% indicate restricted supply;
(c)an average occupancy rate of 80% “tends to indicate a balanced market;”
(d)average occupancy rates below 75% “suggest a tendency to some oversupply” and
(e)average occupancy rates below 70% indicate an oversupply.
86. In the previous two years, the average occupancy rates nationally were between 75% and 80%.[49]
[49] Exhibit PJ1, report page 19
87. Mr Henry explained that a balanced market is one where there is sufficient supply to meet the demand. If a child needs care, they can obtain it. When average occupancy rates exceed 85%, the availability of places in the area is limited. For example, some centres might be full while others only have positions for certain ages on specific days. Consequently, a family might not be able to have their child care needs met. It is rare for a centre to be fully occupied, and the numbers of vacancies might vary from day to day (for example, due to cancellations).
88. An occupancy rate approaching 80% is the benchmark for sector profitability, although individual features of a centre’s expenses and income will affect its profitability. Some might be profitable with an occupancy rate closer to 70%.
89. Mr Henry described his projections for 2021 as an attempt to identify what the market can support to meet the need without creating an oversupply in the market. On present calculations, the current 87% occupancy indicated a supply restriction. There is a need for more places. Looking ahead he would like to see a more balanced market where average occupancy was lower so that people who are looking for care could obtain it. The benchmark for profitability is 80% and that is what he was aiming for. Accordingly, his forecast for the number of places needed in 2021 used a figure of 81%.
90. Mr Henry noted that, in addition to the subject site (with 91 places), there is an approval in place for a 120 place centre at Coombs, and applications for a further 110 place centre at Rivett and a 103 place centre at Weston. In his view, if all of these developments were to proceed contemporaneously before 2021, that potential development of 424 places would more than double the existing supply of places and “may result in an oversupply.”[50]
[50] Exhibit PJ1, paragraph 18
91. On the basis of research conducted by his company, Mr Henry observed that the opening of a new child care centre can have variable impacts depending on the market and existing competitive profile in which it operates. In particular, he noted that enrolments at a new centre can be generated:[51]
(a)because the new child care centre is seen as an attractive alternative to existing older centres, for example where a new centre is perceived to offer better facilities and/or quality of care than existing options;
(b)from local enrolments that were previously lost to other areas because there was previously a limited choice of child care services locally (in other words, a new centre might attract a particular market segment whose needs are not currently being met); and
(c)in a way that increases the long day care participation rate and generates additional demand in a given market (for example where some families have delayed a return to the workforce or have made alternative informal arrangements for care but are willing to utilise new services).
[51] Exhibit PJ1, paragraph 19
92. Mr Henry also noted that, despite the factor listed at [91](a), in many cases well-managed, high-quality not-for-profit centres maintain high occupancy rates and long waiting lists even in markets with new purpose-built entrants. He referred to examples in Melbourne where some small cooperative centres have full occupancy and long waiting lists despite the increased availability of places in other centres. That reflects the different preferences for the types of child care parents like to use.
93. Mr Henry explained in some detail how the figures he relied on were calculated and verified. The estimated average occupancy rate referred to in his report represents a statistical estimate of the occupancy level at all existing centres in the catchment area. It is calculated by dividing the total estimated daily demand by the observed daily supply of places.[52] The estimated daily demand draws on data collected on a quarterly basis by the Office of Early Childhood Education and Child Care and information published annually by the Productivity Commission. The participation rate is the proportion of children in the zero to four years of age group who attend child care services subsidised by the Australian Government. Nationally, the proportion of those children is about 43%. In the ACT, the proportion of children in the zero to five years of age group is about 53%.[53] Mr Henry’s report excluded five-year-olds, as their participation rate is lower because that is the age at which children start attending preschool and prep. The participation rate is half the children in the zero to four years age range, probably around 55% to 60%.
[52] Exhibit PJ1 page 19
[53] See Exhibit PJ 2- Table 3A.19 Proportion of children who are attending Australian Government approved child care services, by single year of age and age group, 2016 (a), (b), (c)
94. For the 2611 postcode area, he adopted a “conservative approach” and used an estimated participation rate of 40% as that was “indicative” of the area where the market was fairly established with an older local population. A lot of the demand is from new people moving into the area, particularly the northern part of the catchment area. The 40% included people accessing child care near the parents’ workplace outside the catchment area. Even with that low participation rate, he estimated that there was a significant proportion of demand which was not being met adequately in the area. In order to reach the average occupancy rate of 87% for the catchment area, he assumed that about 100 places leave the area to utilise services elsewhere or are not using child care.
95. The estimated average occupancy is based on the number of places demanded in the area divided by the number of places supplied. In this case, the estimated participation rate is 40% of the total number of children (739 of 1,847 children). Daily demand is based on an average attendance rate of three days or 28 hours each week, that is, 60% (443 children). That figure is divided by the number of places supplied to reach the 87.14% average occupancy calculated by Mr Henry’s firm.
96. Mr Henry noted that one of the characteristics of the ACT market is that there is a lot of employer-sponsored and not-for-profit child care on or near workplaces. That was factored into his report in terms of the net loss from the catchment area. He accepted that there was a combination of people who prefer to have their child close to them at work and those who have children at such centres because child care is not offered locally, but he did not know which is the dominant factor.
97. If 100 places per day leave the area to use long day care services elsewhere, the figure is 343. The number of places currently available in the catchment area is 394. On that basis, the average occupancy rate is 87% of the available places.
98. To check or validate the 87% figure, Mr Henry’s firm also used a ‘mystery shopper’ telephone enquiry technique to ascertain whether a centre has vacancies for individual children of specific ages (one at a nursery room and one in a toddler room), rather than asking how many vacancies there are at the centre.
99. There was evidence that the 120 place development in Coombs was being constructed at the time of the hearing of this case. In Mr Henry’s opinion, once the additional 120 places become available at Coombs (giving a total of 514 places in the catchment area), the net loss would decrease. That would occur because:
(a)places that currently leave the catchment area would decline; and
(b)people from outside the catchment area would come in to use the child care facilities.
100. Indeed, he suggested that the number of people coming into the area would equal the number going out. That result is “what we see happening,” and would be supplemented by the likely increase in the currently “quite low” participation rate as a result of a new centre in the area where no centre currently exists. In other words, a person who currently is not putting a child in child care would use the new centre. Mr Henry went further to suggest that a child care centre is an important community service that attracts people to live in an area. In his experience, even where developers have built or provided significantly more places than he had anticipated would be needed, there have been high occupancy rates in those areas. In other words, the actual participation rate increased.
101. Mr Henry agreed that there was no survey or other empirical basis for his opinion that the number of children going elsewhere would equal the number of coming in. Rather, “we’re just trying to make our best estimate.” He stated that there is “a lot of interaction between areas and there is a lot of movement in demand between areas and we do our best to model it.”
Critique of Mr Henry’s evidence
102. As noted earlier, no issue was taken with Mr Henry’s experience and expertise. There was some criticism of Mr Henry’s methodology, the reliability of his forecasts and the veracity of some conclusions in his report. Broadly speaking, he was criticised for not identifying local conditions that apply in the ACT. Most of the detailed critique came from Dr Abbey. Her key concerns can be summarised relatively briefly.
103. Dr Abbey queried the meaning of “average occupancy rate” because occupancy rates vary over a year. She suggested that relevant data includes how many vacancies there are per centre, and on what days those vacancies occur, rather than the average occupancy percentage.
104. Dr Abbey agreed that an increase in the order of 10,000 people spread across two suburbs, some further developments in parts of Weston Creek, and some thousands of homes under construction or planned (including in Denman) would be relevant to an assessment of the need for child care places in the area, and would indicate a possible increase in demand for them. However, that data would need to be analysed by reference to such things as where people work, and the number of children under five years of age.
105. Although there could be an undersupplied market currently, for various reasons not all parents put their children in the area where they live. For example, Dr Abbey noted that parents use child care services close to their work because they do not have to rush to leave work to pick up their child, they are nearby if the child is injured or unwell or needs breastfeeding and for birthday activities, and they can use driving time to talk with their child. Also, some employers subsidise or support child care near the workplace. So it is an “informed choice” not just a choice based on the lack of appropriate child care close to home. In Dr Abbey’s opinion, when Mr Henry was writing about undersupply, he did not take into account family day care, and parents’ choice to put children in child care close to work. She also queried his assumption that up to 100 places per day leave the major catchment to utilise places elsewhere, for example near a parent’s workplace.
106. According to Dr Abbey, where there are child care centres in an area that are 85% or 87% full, parents have “quite a bit of leeway for care.” In other words, with such an average figure, there is “some latitude” for parents to find some day care for their children. Her “secret shopper” enquiries suggested that there were vacancies for children of different ages at child care centres in the catchment area.
107. Dr Abbey also took issue with two other of Mr Henry’s statements.
(a)He stated that in “some” cases new child care centres are seen as attractive alternatives yet, in Dr Abbey’s view, they are seen as attractive in “many” cases.
(b)He stated that in many cases well-managed, high quality, not-for-profit centres maintain high occupancy rates and long waiting lists even in markets with new purpose-built entrants, yet Dr Abbey had not found that to be the case. Indeed, she could only recall one such child care centre, and that involves exceptional circumstances that do not apply at the Noah’s Ark Centre Rivett.
108. Nikdia Hume submitted that some of those and other criticisms of Mr Henry’s evidence were “quibbles” which did not detract from his overall demographic assessment that there is an unmet and increasing demand for childcare in Rivett and its surrounding areas. That assessment is supported by the rapid growth of surrounding suburban areas, with an estimated population of 10,300 in the Molonglo Valley (comprising Coombs and Wright) by 2019 and current approval for construction of 2,900 dwellings in Denman Prospect, as set out in Ms Gallacher’s witness statement.[54] It was submitted that, although his estimates are estimates, his evidence should be preferred in the absence of any empirical evidence from witnesses for Noah’s Ark.
[54] Exhibit PJ5
Submissions by Noah’s Ark
109. The case for Noah’s Ark has been outlined earlier and is clear from the evidence and submissions referred to above. In summary it submits that:
(a)Noah’s Ark has conducted and continues to conduct various early learning community programs in furtherance of its objects, including from the Noah’s Ark Centre Rivett;
(b)those programs provide benefits to participants which are not provided elsewhere, and hence are of benefit to members of the community who participate in them and to the community generally;
(c)Noah’s Ark uses income generated by the Noah’s Ark Centre Rivett, and which is surplus to its needs in maintaining that centre, to subsidise the cost of the community programs;
(d)the centre being constructed at Coombs will meet child care needs in the northern part of the catchment area, and there is no present need for a further long day care centre in Rivett or Weston Creek; and
(e)the proposed development will reduce the occupancy rate at the Noah’s Ark Centre Rivett and thereby reduce and probably eliminate the level of surplus funds derived from that centre so that Noah’s Ark will not be able to maintain its community programs and meet the cost of supporting children with special needs enrolled in the centre. In other words, Noah’s Ark would have to reduce and probably cease its community program.
Submissions by the Authority
110. The Authority did not provide a detailed analysis of, or make detailed submissions in relation to, the evidence. Rather, it submitted that the suggested effect of the proposed development on the business operations of Noah’s Ark is too speculative or remote to constitute a material detriment. That submission is developed more fully in relation to the question of standing, considered later in these reasons the decision.
Submissions by Nikdia Hume
111. There are three limbs to the submissions by Nikdia Hume in relation to the evidence summarised above. First, Nikdia Hume submits that the evidence provides insufficient support for Noah’s Ark’s case. Second, Nikdia Hume submits that, despite identifying the impacts of competition as the basis for its application to the Tribunal, Noah’s Ark has not indicated how such a consideration is relevant to the Tribunal when considering the DA under the Territory Plan and the P&D Act. Third, it is doubtful whether Noah’s Ark has standing to make the application.
112. The second and third limbs of that submission are considered later in these reasons.
113. As to the first, Nikdia Hume submits that there is insufficient evidence that Noah’s Ark provides unique community-based programs and special needs child care, or that such services would be undermined by the DA.
114. In its submission, the argument that provision of Noah’s Ark’s services would be undermined by the DA cannot be maintained. That argument assumes that:
(a)Noah’s Ark’s services are unique;
(b)there is insufficient demand for additional long day care in the Rivett catchment area; and
(c)cross-subsidisation from Noah’s Ark’s child care centre at Rivett is the only way to provide its particular services.
115. Nikdia does not dispute that Noah’s Ark’s extended programs are of merit to the community. However, Nikdia submits that the evidence provided by Noah’s Ark is little more than a recital of the evidence of its own staff with minimal independent observation by its expert Dr Abbey, let alone comparison to other services in the market. Furthermore, Noah’s Ark failed to expand on its evidence in relation to special needs child care. The evidence appears to be confined to three children with disabilities who have been cared for since 2011(see [49], [51]).
116. In Nikdia Hume’s submission, cross-subsidisation from the Noah’s Ark Rivett Centre is simply the business model chosen by Noah’s Ark. It is also one which assumes (improbably in Nikdia Hume’s submission) that no change will ever occur in the child care market. However, Noah’s Ark ignores other potential sources of change which may affect its operations, such as:
(a)a decision by the Government to reopen the Rivett school, or rezone and sell it (with the consequent need for the relocation of Noah’s Ark’s long day services);
(b)the Board of Management of Noah’s Ark adopting a different business strategy, as it has done in the past (such as government funding).
117. Nikdia also notes that Noah’s Ark’s current long day care venture is relatively recent (having commenced in 2009) and requires an occupancy rate of 90%, which is well above the accepted profitability norms established by the Productivity Commission.
118. Nikdia points to the evidence from Mr Henry about the ability of boutique, not-for-profit centres to survive in competitive markets which, it submits, was more robust than the pessimistic conclusions of Dr Abbey. Furthermore, Nikdia suggests that there is potential for Noah’s Ark to rely and expand upon its well-established brand, and cites an email from a former client to Ms Brennan that spoke with some passion about “another future” for Noah’s Ark, specialising in expanded special needs care.[55]
[55] Exhibit A2, document 5
119. In essence, Nikdia submits that it is far from clear how the DA would impact upon the viability of Noah’s Ark’s extended services. On the other hand, it is clear that if the DA were refused the residents of Rivett would be deprived of an increase in access to child care services, including for children with special needs.
Consideration and conclusions
120. The question whether and how the proposed development on the subject site would adversely affect Noah’s Ark can be answered, although not in precisely quantified terms, by reference to the evidence summarised earlier.
121. There were differences of degree between witnesses about the extent of the current and foreseeable demand for child care places in the catchment area of the subject site. Those differences are understandable when one examines closely the statistical data on which they were based. It is clear that at key steps in his calculations Mr Henry was making certain assumptions, and in his analyses he was drawing on experience outside the ACT. His evidence was much more than an educated guess, and his assumptions and workings were clearly articulated. Nonetheless, the apparent precision of figures in tables in his report belies the uncertainty inherent in predicting not only population trends within the catchment area but also human behaviour on such complex decisions as whether people will use child care facilities, how often they will use them, and which centre or centres they will choose. The differences between the opinions of some witnesses can be attributed partially to different estimates of the number of children whose needs are met and will continue to be met outside that area (especially at centres near parents’ workplaces) and/or whether a new child care centre would attract some people from outside the catchment area. Such differences are to be expected given the somewhat speculative nature of estimating current and likely demand for child care facilities in the catchment area surrounding the subject land. We conclude that, although Mr Henry was sufficiently qualified to give his evidence and his evidence was generally credible, Mr Henry tended toward optimism in his estimates of the future demand for child care facilities in the catchment area and the number of child care places that would be used in the foreseeable future.
122. With those cautions in mind, we find on the basis of the evidence that:
(a) having regard to national figures and taking into account the demographics of the catchment area and the data about occupancy rates provided by Ms Brennan and Mr Henry, there is currently a slight oversupply of child care places for that area;
(b) the Noah’s Ark Centre Rivett has an occupancy rate at or above 83% which is comparable to other child care centres in the catchment area[56] and within the range at which child care centres are usually able to operate at a profit;
[56] See also the figures provided by Ms Brennan listed earlier
(c) there will continue to be an increase in the population of the catchment area, particularly in the northern suburbs such as Coombs, and that increase will comprise a higher proportion of families with young children than in the more established southern suburbs which have a generally older population;
(d) there will be some increase in demand for child care places in the catchment area as a result of the change in the number and ages of people in the area;
(e) some parents will choose to place their young children in child care outside the catchment area (usually close to where the parents work) even if there are otherwise suitable facilities in the catchment area; and
(f) because there is no evidence that the establishment of new child care centres in or near the subject site would attract any or many children to the catchment area, we are not satisfied that, if one or more new centres were opened, the number of children attracted to centres in the area would offset those using child care facilities outside the area.
123. More specifically, it is clear from Mr Stone’s evidence that Kids Club Rivett would provide not only general child care facilities and services but would also provide care for children with a range of conditions, physical disabilities, and additional needs. Having considered that evidence alongside the evidence provided for Noah’s Ark (including its special needs focus), we find that the proposed development would be in direct competition with the Noah’s Ark Centre Rivett in terms of the range of children it would seek to attract.
124. We accept that Noah’s Ark has a good reputation in the community for the nature and standard of child care services it provides and that, as a consequence, it might have a larger catchment area than might be usual for a child care centre. It should be able to operate successfully in a more competitive marketplace. The loyalty and support it has attracted since 2009 is likely to continue. However, having regard to the evidence about what Kids Club Rivett would provide, the proximity of the subject site to the Noah’s Ark Centre Rivett and the general evidence about the usual impact that a new child care centre will have on a neighbouring centre (including where the existing centre has older accommodation and facilities), we find that a child care centre on the subject site would attract some people who currently use, or in the future would otherwise have used, the Noah’s Ark Centre Rivett.
125. Although it is not possible on the basis of the evidence before the Tribunal to quantify the numbers of children who might be lost by (or not attracted to) the Noah’s Ark Centre Rivett, we are satisfied that there would be some reduction and hence a loss of revenue to Noah’s Ark. That impact is likely to be increased if other developing or proposed centres in the catchment area proceed.
126. Noah’s Ark has a licence to use premises at 79 Bangalay Crescent which seems to be on a monthly basis. The licence provides less security than a licence for a longer term or a lease of the premises used as the Noah’s Ark Centre Rivett would offer.[57] However, there was no evidence that the licence will not continue to be renewed, as has been the case for about 18 years. Nor is there any evidence to suggest that the ACT Government intends to reopen the Rivett school, rezone the land or sell it. Consequently, we do not consider that the apparent insecurity of the legal basis for Noah’s Ark’s continuing to use those premises constitutes a significant impediment to its use and enjoyment of the land. The apparent offer of a new licence in recent months lends support to that conclusion.
[57] Clause 6(a) of the licence expressly states that nothing in the licence shall create or be construed as creating any tenancy or shall be construed as conferring upon the licensee any estate or interest in the premises or any part thereof
127. There was no dispute, and we find, that Noah’s Ark finances and provides (in collaboration with other organisations) a distinctive range of community programs that would not otherwise be available. Those programs are valued by disadvantaged, vulnerable and isolated families and their children in the ACT and Queanbeyan. For that reason, the programs provide a benefit to the community and not just the direct participants. We also find that:
(a) most of those programs receive little or no financial support from governments; and
(b) the financial and other support provided by Noah’s Ark for those programs is critical, if not essential, for their continuation.
128. The financial statements provided to the Tribunal, particularly the income and expenditure statements, do not separately identify the amounts directed by Noah’s Ark each year to individual community programs. Consequently, it is not possible to say by reference only to that evidence how much financial support Noah’s Ark provides. We have had to rely on the evidence of Mr McMichael and Mr Wilson for that information. Given the fluctuating annual financial results achieved by Noah’s Ark, it seems that in some years the provision of that support led to a net loss in terms of annual income and expenditure. It appears from the evidence provided by Noah’s Ark that its operations at Noah’s Ark Centre Rivett are not currently sufficiently profitable to sustain the level of financing its community programs it has provided in the past and wants to provide in the future.
129. Accordingly, we find that:
(a)the financial support that Noah’s Ark provides to community programs is derived from the income (though not always surplus to expenses) received by the Noah’s Ark Centre Rivett;
(b)to attain and sustain a level of surplus to provide that financial support, the Noah’s Ark Centre Rivett would need an occupancy rate at or above 90%, a rate which it has not sustained in recent years; and
(c)any reduction in enrolments as a consequence of the proposed development reaching fruition would reduce Noah’s Ark’s income and hence the potential for surplus funds and, although not necessarily threatening the viability of the Noah’s Ark Centre Rivett, would reduce further and perhaps eliminate its capacity to support the community programs from its surplus funds.
Does Noah’s Ark have standing to bring the application?
130. As noted early in these reasons for decision, there are two threshold issues in this case:
(a)whether Noah’s Ark has standing to bring the application; and
(b)whether the Tribunal has jurisdiction to hear the application.
Having considered the evidence about whether and how the proposed development would (albeit indirectly) adversely affect the community programs operated by Noah’s Ark, it is possible to deal with those issues.
131. The question whether Noah’s Ark has standing to bring the application is to be resolved by reference to the scheme in sections 407, 408A and 419 and Schedule 1 of the P&D Act. In summary, the section 408A allows an ‘eligible entity’ for a ‘reviewable decision’ to apply to the Tribunal for a review of the decision. Section 407 defines:
(a)‘reviewable decision’ to mean a decision mentioned in Schedule 1 column 2 made by a decision-maker; and
(b)‘eligible entity’ for a reviewable decision to mean an entity mentioned in Schedule 1 column 3 for the decision.
132. Item 4 of Schedule 1 lists as a ‘reviewable decision’ a decision under section 162 to approve a development application in the merit track, whether subject to a condition or otherwise. An entity is an ‘eligible entity’ in relation to such a decision if:
(a)the entity made a representation under section 156 about the development proposal or had a reasonable excuse for not making a representation; and
(b)the approval of the development application may cause the entity to suffer ‘material detriment’.
133. Section 419 sets out the scope of, and limits to, the expression ‘material detriment’.
419Meaning of material detriment
(1)In this Act:
material detriment, in relation to land—an entity suffers material detriment in relation to land because of a decision if—
(a)the decision has, or is likely to have, an adverse impact on the entity’s use or enjoyment of the land; or
(b)for an entity that has objects or purposes—the decision relates to a matter included in the entity’s objects or purposes.
(2)However, an entity does not suffer material detriment in relation to land because of a decision only because the decision increases, or is likely to increase, direct or indirect competition with a business of the entity or an associate of the entity.
NoteMaterial detriment is used in sch 1.
(3)In this section:
associate, of a person, means––
(a)the person’s business partner; or
(b)a close friend of the person; or
(c)a family member of the person.
134. Both the Authority and Nikdia Hume submit that Noah’s Ark does not have standing to bring the application to review the Authority’s decisions. They correctly distinguish between whether Noah’s Ark has standing and whether Noah’s Ark has any legislative basis to challenge the Authority’s decisions. In other words, even if Noah’s Ark has standing to bring the application, that does not mean that Noah’s Ark will succeed. If Noah’s Ark has standing to bring the application, it would still have to establish that the application is well founded (an issue dealt with later in these reasons).
135. Although the Authority and Nikdia Hume submit that Noah’s Ark lacks standing, their submissions adopt somewhat different reasoning.
Authority’s submissions
136. The Authority submits that Noah’s Ark does not raise any planning issue. Rather it asserts a future effect on its business operation of direct or indirect competition from the proposed development. As such, Noah’s Ark does not meet the standard required of ‘material detriment’ under section 419 and Schedule 1 of the P&D Act. That section is a ‘statute-specific’ standing rule that must be applied in this case. There is no occasion for the application of any general law rule. The Authority also submits that, in any event, Noah’s Ark does not have a right to protection from competition via the planning and development process.
[150] Kentucky Fried Chicken v Gantidis (1979) 140 CLR 675, 687
266. Noah’s Ark might also consider increasing its prices for some services, or charging for services that it currently provides without charge.[151] As a consequence, some services that are said to be threatened by the proposed development could be saved. Others might be lost. There might be other ways to rationalise Noah’s Ark’s operations to enable it to maintain the facilities it states are threatened. In other words, Noah’s Ark could undertake an internal reorganisation to minimise the impact of the proposed development on its operations.
[151] An option suggested to Noah’s Ark by Dr Abbey (see [72] )
267. Further, the Authority submits that if Noah’s Ark’s business at Rivett is less competitive because of its ageing premises, then there is less justification for protecting it from competition from new purpose-built facilities. Indeed, it might spend money upgrading its premises and curtail what it spends on other things.
268. Third, the Authority submits that a possibility that a sub-operation of the business may be lost is too speculative or remote an impact. In particular:
(a)it assumes that the demand for child care places at the future time of opening of the proposed facility will be such as to reduce patronage of Noah’s Ark day care program at Rivett (even though Noah’s Ark’s own figures suggest that demand is increasing, or has increased, by about 600% since 2009);
(b)it assumes that the relevant programs will be “lost” yet there is nothing to suggest that the new facility, or other facilities, will not offer similar programs in response to demand or need. Indeed, the evidence from Mr Stone about the proposed Kids Club Rivett (summarised at [22]-[26]) suggests that the new facility would provide a program for disabled people and could avail itself of Commonwealth Government support. Given that there is no proprietary interest in the programs currently operated by Noah’s Ark, there would be nothing to stop the Kids Club Rivett or some other centre nearby from offering those programs. Nor would Noah’s Ark be prevented from moving a particular program to one of its other venues; and
(c)it is speculative to suggest that Noah’s Ark’s business over its six New South Wales and ACT locations could not raise or lower fees, obtain additional government grants, or otherwise rationalise its operations so as to maintain some or all of its uneconomic programs.
269. The Authority agreed that ‘probable’ in section 120(g) should be read with its ordinary English meaning, being more than a possibility and in contradistinction to fanciful, remote or speculative. It submits that:
(a) Noah’s Ark does not have a right to protection from the mere possibility that changing circumstances might affect its business; and
(b) far from the proposed development having a probable impact, including probable environmental impacts, the possibility that a sub-operation of a business may be lost is too speculative or remote an impact.
Submissions by Nikdia Hume
270. Counsel for Nikdia Hume pointed out the tenuous link, if any, between the ‘probable impact’ of the proposed development and the ‘environmental impacts’ for which Noah’s Ark contend by reference to the definition of ‘environment’. He submitted that the ‘economic characteristics’ in paragraph (h) of the definition of ‘environment’ need to affect or be affected by the things mentioned in paragraphs (a) to (f) of that definition, which he described as “more earthy, organic, environmental, greenie type considerations.” In other words, he submitted, the definition does not include a “stand alone” reference to economic characteristics. In this case, the economic impact of the proposed development does not flow from matters listed in paragraphs (a) to (f) of the definition of ‘environment’ but flows from the way in which a particular land occupier uses the profits from the business.
271. As noted earlier, Nikdia Hume submitted that the discretionary considerations under section 120 are irrelevant to an application for review of an approved DA. However, for completeness and to limit the potential for remittal of this matter, Nikdia Hume asked the Tribunal to consider whether the discretionary considerations under section 120 have been complied with.
272. Much of what Nikdia Hume submitted on this matter was considered earlier in these reasons in relation to the potential implications of the proposed development for the operations of the Noah’s Ark Centre Rivett. It is not necessary to repeat those submissions or the evidence on which they rely.
273. Nikdia Hume also relied on the evidence of Ms Gallacher. She gave expert opinion evidence as a town planner in relation to DA 201528713 to the effect that,[152] although she could not comment on the matters which are at the heart of Noah’s Ark’s case,[153] she could comment on whether competition and the impacts of competition are a relevant consideration when assessing a DA under the Territory Plan and the P&D Act. In her opinion (which extended beyond the operation of section 120):[154]
[152] Exhibit PJ41, paragraph 11
[153] That is, whether the DA would lead to increased competition in long day child care, reduced revenue for Noah's Ark and a diminished capacity to cross-subsidise other child care programs, and whether Noah's Ark's care programs are unique
[154] Exhibit PJ41, paragraphs 10, 17-39
(a)Noah’s Ark has not identified how DA 201528713 fails to comply with the Territory Plan or the P&D Act:
(b)section 119(1)(a) is relevant to this matter;
(c)only some codes deal with the principle and substance of the proposal;
(d)the CZDC (including Rule 2 and Criterion 2) does not require consideration of competition or the impacts of competition arising from this proposal;
(e)the Community and Recreational Facilities Location Guidelines General Code does not require consideration of the competition impacts of community and recreational facilities to one another;
(f)the Lease Variation General Code does not contain any requirement to consider competition or the impact of competition when considering proposed lease variations;
(g)the matters listed in section 120(a) to (f) were either not relevant or had been satisfied;
(h)it is open to the decision-maker to consider competition impacts of a development under section 120(g) provided that those impacts are “probable” (not fanciful or unlikely). Section 120(g) is not exclusive. Although it does not mandate consideration of the “nature, extent and significance” of probable social or economic impact, the decision-maker may consider these. The decision-maker maintains the discretion to approve any development, irrespective of the probability, nature, extent and significance of its impacts.[155]
[155] Exhibit PJ4, paragraph 39
274. Having determined that section 120(d) and (g) raise the potential for the consideration of competition and the impact of competition when deciding a development application in the merit track, Ms Gallacher expressed the opinion[156] that the appropriate weighting to be attributed to these matters is influenced by:
(a)the fact that the Territory Plan does not contemplate or attempt to mediate economic competition between community uses or types of community uses, and limits consideration of competition in the impact of competition to a small number of defined situations,[157] none of which is relevant here;
(b)the fact that the Territory Plan encourages the delivery of community uses in commercial centres;[158]
(c)the provision in section 120(d) that the right to review conveyed by Schedule 1 Column 1 item 4 is limited a situation where an entity made a representation and the approval of the development application may cause the entity to suffer ‘material detriment’ (an expression which is defined by section 419 to specifically exclude consideration of competition impacts, be they actual, likely, direct or indirect);
(d)section 120(g) does not limit consideration to probable negative impacts. Considering the object of the P&D Act and the Territory Plan, it is reasonable to balance considerations of the probable negative impacts of a development with its probable positive impacts. In this instance, it would be appropriate to consider the probable positive impacts of delivering additional child care spaces to the community, within the context of established community need.
[156] Exhibit PJ4, paragraph 41
[157] Ms Gallacher gave as an example the reference in Criterion 49 of the CZDC to competition between residential and commercial/retail purposes when retail development of a site in a local centre is contemplated. Criterion 49 is explicit in its intention to demonstrate that it does not compromise commercial viability
[158] See the inclusion of community uses as merit assessable uses in most commercial zones, and the relevant provisions of the Community and Recreational Facilities Location Guidelines General Code
275. Ms Gallacher described the context of established community need as referring to the general presumption in government policy that the delivery of community facilities is a positive outcome. Conversely, the removal of community facilities would not be a desirable outcome.
276. In her opinion, the weighting attributed to probable negative competition impacts arising from the proposed development should be “moderated.” Further, although competition and the impact of competition may be considered, in her view they are “not significantly relevant considerations.”[159]
[159] Exhibit PJ4, paragraphs 42, 43
277. Nikdia Hume submits that it is far from clear how the DA would impact upon the viability of Noah’s Ark extended services. Yet it is clear that if the DA is refused, residents of Rivett would be deprived of an increase in access to child care services, including for children with special needs.
278. Nikdia Hume also submits that, in considering section 120(g) of the P&D Act, the Tribunal should find that:
(a)there is insufficient evidence of the probability of the impacts alleged by Noah’s Ark; or
(b)any such impact does not weigh in favour of a refusal of the DA.
Consideration and conclusion
279. As noted earlier, Noah’s Ark submits, in summary, that only section 120(g) of the P&D Act applies in this case. That provision states:
In deciding a development application for a development proposal in the merit track, the decision-maker must consider the following:
...
(g) the probable impact of the proposed development, including the nature, extent and significance of probable environmental impacts.
280. We note that in the Statement of Findings the delegate of the Authority wrote in relation to section 120(g) of the P&D Act, “Based on the matters to be considered by the relevant Codes there are no probable environmental impacts of significance associated with the proposed development.” In a formal sense, it would appear that the requirement of section 120(g) was met. However, it is not clear that the delegate reached that conclusion based on the wide reading of ‘environmental impacts’ advanced by Noah’s Ark. There is a question whether the Authority should have interpreted section 120(g) in that way.
281. Section 120(g) directs attention to ‘the probable impact’ of the proposed development (in this case, the approved child care facility) and within that, the nature, extent and significance of ‘probable environmental impacts’ of that development. In other words, where more than one environmental impact is probable, the decision-maker must consider aspects of those probable environmental impacts when considering the probable impact of the proposed development as a whole.
282. There is judicial authority for the approach advanced by each party to the meaning of the phrase ‘probable impact’. For example, in Darkan v The Queen[160] the High Court considered in detail the use of the word ‘probable’ in the phrase ‘a probable consequence’. Gleeson CJ, Gummow, Heydon and Crennan JJ made two preliminary points about the use of the word “probable” in expounding and applying rules of law.
[160] Darkan v The Queen [2006] HCA 34
(a)The application of legal tests that turn on questions of probability will vary with the context in which the questions asked. ‘Probability’ can denote a variety of degrees of confidence, and probabilities can be of different degrees of strength.[161]
(b)Whatever precise meaning the word ‘probable’ has in a particular context, it is usually used to establish a contrast to what is ‘possible’. Thus, the Concise Oxford English Dictionary defines ‘possible’ as that which “may exist or happen, but that is not certain or probable.”[162] Although the word ‘probable’ has diverse meanings, all common usages of it suggest a more exacting standard than ‘possible’.[163]
Kirby J also highlighted the difference between ‘probable’ and ‘possible’.[164]
[161] Darkan v The Queen [2006] HCA 34 at [24]
[162] Darkan v The Queen [2006] HCA 34 at [25]
[163] Darkan v The Queen [2006] HCA 34 at [75]
[164] Darkan v The Queen [2006] HCA 34 at [127], [129]
283. Adopting that approach, ‘the probable impact’ in section 120(g) means that the occurrence of the impact must be probable as distinct from possible.[165]
[165] See Darkan v The Queen [2006] HCA 34 at [79], [132]
284. Next it is necessary to decide whether the proposed development will have probable ‘environmental’ impacts. We make three observations about the definition of ‘environment’ in the P&D Act (quoted at [241]) and its operation in this case. First, it does not define ‘environment’ in the same way as other words are defined to ‘mean’ or ‘include’ specified items. For example, ‘natural environment’ is defined in section 317(6) to mean “all biological, physical and visual elements of the earth and its atmosphere, whether natural or modified.” By comparison, the definition of ‘environment’ merely lists a series of items that are ‘part of’ the environment. Thus, the whole (or at least, one infers, a substantial part) of what is the “environment” for the purpose of the P&D Act is determined by reference to its constituent parts.
285. Second, the things listed in paragraphs (a) to (f) of the definition include naturally occurring items, manufactured or modified structures and areas, people and communities, and specified types of qualities and characteristics of areas. Paragraph (g) includes, as part of the environment, interactions and interdependencies within and between those things. At the end of the list, paragraph (h) includes social, aesthetic, cultural and economic characteristics that affect, or are affected by, the things mentioned in paragraphs (a) to (f). A characteristic is a trait, mark or quality of something rather than the thing itself. It is not clear what the social, aesthetic, cultural and economic characteristics are characteristics of. However, this definition provides that the specified characteristics themselves affect, or are affected by, other specified things that are part of the environment.
286. Third, the definition of ‘environment’ can only support the application by Noah’s Ark if the ‘economic characteristics’ affect or are affected by ‘the things’ mentioned in paragraphs (a) to (f). Assuming that the expression ‘the things’ does not require all things, Noah’s Ark can only succeed if the approved development is one of those things[166] that affects ‘economic characteristics’.
[166] Perhaps, for example, the structures that are manufactured and the area that is modified as a result of approval of the DA – see paragraph (d) of the definition of ‘environment’
287. If an ejusdem generis approach is taken to that definition of ‘environment’, there would seem to be a slender statutory basis for this aspect of the submissions of Noah’s Ark. The economic impact argument (summarised at [239]) seems to have little, if any, direct link to the types of items listed in that definition. However, the other parties did not contend strongly that the argument could not be made (although they disputed its merits) and the judgments cited above illustrate that courts in other jurisdictions have ruled on analogous arguments in similar statutory contexts. We proceed accordingly.
288. In this case it was not argued, and we do not find, that the Noah’s Ark Centre Rivett would be put in jeopardy and the resultant community detriment would not be made good by the proposed development. Rather, the argument advanced by Noah’s Ark is that the community programs that it provides or supports financially would be in jeopardy if the proposed development proceeds, those programs would not be provided by others, and hence there would be a resultant community detriment. Accordingly, for the purpose of section 120(g), that should be taken into account as a probable environmental impact of the proposed development.
289. As recorded earlier in these reasons for decision (see [122] to [129]), we are satisfied that the development on the subject site as proposed in DA 2012528713 would have an impact on the operations of the Noah’s Ark Centre Rivett. The proposed development by Kids Club Rivett would provide more than just another childcare centre close to the Noah’s Ark Centre Rivett. It would provide for children with special needs in ways that would be in direct competition with the services currently provided by Noah’s Ark in Rivett. Consequently, families in the catchment area (including those children with special needs) would be provided with an additional range of services and facilities from which to choose.
290. In particular, we conclude that the probable negative impact of the proposed development for Noah’s Ark would include some impact on the economic circumstances of the Centre. That, in turn, would have a probable negative impact on the financial capacity of Noah’s Ark to support the range of community programs that it currently supports or provides in collaboration with other organisations.
291. That conclusion does not necessarily mean that, were the Tribunal to have regard to section 120(g) of the P&D Act, Noah’s Ark’s application to have the Authority’s approval of DA 201528713 set aside would succeed and the decision would be replaced with the decision to refuse the DA.
292. Drawing on the language used in decisions considered above, we consider that the submissions advanced by Noah’s Ark are answered as follows:
(a)to the extent that the submissions are based on the consequences of economic competition between competitors in the marketplace, that is not an environmental or planning consideration to which section 120 of the P&D Act applies in the sense that the Territory Plan does not generally contemplate or attempt to mediate competition between community uses or types of community uses, let alone sub-categories of those uses (such as using surplus funds derived from the permitted use for broader community benefits);
(b)the submissions proceed on the basis that Noah’s Ark could only continue to support the programs from surplus funds that it receives from the Noah’s Ark Centre Rivett, and those surpluses would be reduced or eliminated if the proposed development proceeds, yet in recent years there have been significant constraints on the capacity of Noah’s Ark to generate sufficient surplus income for that purpose from the Noah’s Ark Centre Rivett, and those constraints are and have been unrelated to the proposed development;
(c)we are not convinced that, if the proposed development proceeds, the adverse implications would be such that (for that reason alone) the programs enjoyed by the community would be put in jeopardy and that would threaten the extent and adequacy of available facilities at Rivett and the broader ACT community. Noah’s Ark might find other ways to continue supporting some or all of the programs, as it has done in the past (for example, by prioritising some programs over others, negotiating access to government funding, or charging for some programs) and/or some services might be provided by Kids Club Rivett.
293. It is also necessary to remember that, although the decision-maker must consider the matters listed in section 120, the decision-maker maintains the discretion to approve a development irrespective of the probability, nature, extent and significance of its impacts. It is necessary to weigh or balance the various matters in reaching the decision whether to approve the development.
294. In this case, when assessing the ‘probable impact’ of the proposed development, it is appropriate to consider both adverse and beneficial impacts. Clearly, the child care facilities proposed to be provided by Kids Club Rivett are likely to be beneficial to the community in the catchment area and, possibly, to some people outside that area. They would increase the range of facilities on the subject site and ensure that community and recreation facilities remain available to the community
295. From a broader perspective, we accept that if Noah’s Ark continues with its current management arrangements in relation to the funding of the community programs, those programs will be adversely affected by the proposed development. In those circumstances (to adapt the words of R Jones DCJ in Bassingthwaite) the proposed development would place in jeopardy income used to subsidise community programs. At least some of those programs or services might not be provided by another organisation or organisations (including Kids Club Rivett) to the local community or to families elsewhere in the ACT and Queanbeyan.
296. The negative impact, particularly for some families who have special needs and who might not otherwise have access to one or more of the programs, is worthy of comment. However, when considered along with such other matters in section 120 as are relevant, it should not result in the decision to approve the DA being set aside. In other words, the need for such programs (which might be met in one or more other ways) does not outweigh the factors in support of approval of DA 201528713. The potential loss of funds now used for the public benefit might be a relevant consideration, but it is not a significant or determinative consideration.
Summary of conclusions and order
297. Although we have set out the evidence, the parties’ submissions and our reasoning in some detail, our conclusions can be summarised quite briefly. For the reasons set out above:
(a)we are satisfied that if the proposed development on the subject site were to proceed it would have some adverse effect on the operations of the Noah’s Ark Centre Rivett, and any consequential significant reduction in the income of that Centre would affect (and potentially eliminate) the capacity of Noah’s Ark to support the community programs that it finances from surplus funds received at the Centre;
(b)by the combined operation of sections 407, 408A, 419 and Schedule 1 of the P&D Act, Noah’s Ark is not an ‘eligible entity’ and hence does not have standing to make the application to the Tribunal for a review of the Authority’s decision to approve DA 201528713;
(c)if Noah’s Ark has standing to make that application, it has not identified how the DA does not comply with the relevant Code (CZDC) and hence, by operation of section 121(2)(a) and (b) of the P&D Act, Noah’s Ark does not have a right of review of the Authority’s decision;
(d)if the Tribunal has jurisdiction to deal with the application, the probable impact of the proposed development at the subject site on the financial capacity of Noah’s Ark to support community programs the Noah’s Ark Centre Rivett and elsewhere is not a significant or determinative consideration and, having regard to the ways in which the DA satisfies the criteria set out in section 120, there is no basis for setting aside the Authority’s decision to approve DA 20158173 and to substitute a decision refusing DA 2015 8713.
298. It follows that the Tribunal must dismiss Noah’s Ark’s application for review of the Authority’s decision to approve DA 201528713.
………………………………..
President G Neate AM
Delivered for and on behalf of the Tribunal
Attachment A
Division 7.2.3 Merit track
119Merit track—when development approval must not be given
(1)Development approval must not be given for a development proposal in the merit track unless the proposal is consistent with—
(a)the relevant code; and
(b)if the proposed development relates to land comprised in a rural lease—any land management agreement for the land; and
(c)if the proposed development will affect a registered tree or declared site—the advice of the conservator of flora and fauna in relation to the proposal.
Note 1An application cannot be approved if it is inconsistent with the territory plan (see s 50) or the National Capital Plan (see Australian Capital Territory (Planning and Land Management) Act 1988 (Cwlth), s 11).
Note 2Relevant code—see the dictionary.
(2)Also, development approval must not be given for a development proposal in the merit track if approval would be inconsistent with any advice given by an entity to which the application was referred under section 148 (Some development applications to be referred) unless the person deciding the application is satisfied that—
(a)the following have been considered:
(i)any applicable guidelines;
(ii)any realistic alternative to the proposed development, or relevant aspects of it; and
(b)the decision is consistent with the objects of the territory plan.
(3)To remove any doubt, if a proposed development will affect a registered tree or declared site—
(a)the person deciding the development application for the proposed development must not approve the application unless the approval is consistent with the advice of the conservator of flora and fauna in relation to the proposal; and
(b)subsection (2) does not apply in relation to the conservator’s advice.
120Merit track—considerations when deciding development approval
In deciding a development application for a development proposal in the merit track, the decision-maker must consider the following:
(a)the objectives for the zone in which the development is proposed to take place;
(b)the suitability of the land where the development is proposed to take place for a development of the kind proposed;
(c)if an environmental significance opinion is in force for the development proposal—the environmental significance opinion;
NoteEnvironmental significance opinion—see s 138AA. Environmental significance opinions expire 18 months after they are notified (see s 138AD).
(d)each representation received by the authority in relation to the application that has not been withdrawn;
(e)if an entity gave advice on the application in accordance with section 149 (Requirement to give advice in relation to development applications)—the entity’s advice;
NoteAdvice on an application is given in accordance with section 149 if the advice is given by an entity not later than 15 working days (or shorter prescribed period) after the day the application is given to the entity. If the entity gives no response, the entity is taken to have given advice that supported the application (see s 150).
(f)if the proposed development relates to land that is public land—the public land management plan for the land;
(g)the probable impact of the proposed development, including the nature, extent and significance of probable environmental impacts.
121Merit track—notification and right of review
(1)To remove any doubt, if a development proposal is in the merit track, the application for development approval for the proposal must be publicly notified under division 7.3.4.
(2)If there is a right of review under chapter 13 in relation to a decision to approve an application for development approval for a development proposal in the merit track, the right of review is only in relation to the decision, or part of the decision, to the extent that—
(a)the development proposal is subject to a rule and does not comply with the rule; or
(b)no rule applies to the development proposal.
HEARING DETAILS
FILE NUMBER:
AT 70/2016
PARTIES, APPLICANT:
Noah’s Ark Resource Centre Incorporated
PARTIES, RESPONDENT:
ACT Planning and Land Authority
PARTIES, PARTY JOINED
Nikdia Hume Pty Ltd
COUNSEL APPEARING, APPLICANT
Mr R Arthur
COUNSEL APPEARING, RESPONDENT
Dr D Jarvis
COUNSEL APPEARING, PARTY JOINED
Mr C Erskine SC
SOLICITORS FOR APPLICANT
Elringtons Lawyers
SOLICITORS FOR RESPONDENT
ACT Government Solicitor
SOLICITORS FOR PARTY JOINED
Meyer Vandenberg
TRIBUNAL MEMBERS:
Mr G Neate AM, President
Mr G Trickett, Senior Member
DATES OF HEARING:
8, 9, 10 March 2017
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